Bell-Friendly IP-Video Bill Introduced

1/04/2005 8:01 AM Eastern

By: Ted Hearn

On the first day of the new Congress, Reps. Cliff Stearns (R-Fla.) and Richard Boucher (D-Va.) Tuesday introduced legislation from last year that would allow the Baby Bells to offer Internet-protocol video free from traditional state and federal regulation.

The bill, first unveiled last July, is designed to be a marker as Congress gives consideration to legislation that would update the Telecommunications Act of 1996.

A key component of the Stearns-Boucher bill was implemented in November, when the Federal Communications Commission declared that voice-over-Internet-protocol service is interstate in nature and not subject to a hodgepodge of state rules. The state of California is appealing that ruling in federal court.

“Although the FCC decision in November to declare VoIP services interstate in nature and, thus, subject to the [FCC’s] authority represented a step in the right direction, legislation is still needed to change the current regulatory scheme in order to allow these technologies to flourish,” Stearns said in a prepared statement.

Under Stearns-Boucher, neither the FCC nor the state would be permitted to regulate the entry or exit of “advanced Internet communications-service” providers or to impose rates, terms and conditions on the services offered.

The bill specifically shields IP-video providers from federal and state regulation -- a deregulatory step that would seem to support SBC Communications Inc.’s effort to offer pay-video services in competition with cable without local franchises.

Presumably, if cable MSOs converted their video distribution to an IP format, they could also escape local-franchise requirements.

The bill would allow the FCC to regulate voice-Internet services in a few ways, including a requirement that cable operators contribute VoIP revenue to universal service, the subsidy program for rural telephone companies with high fixed costs.